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Tuesday, December 21, 2010

Panacea Bio-tec is the second largest vaccine manufacturer in India. About 70% income of the company is generated from vaccine sales and rest from formulations. It is one of the largest oral polio vaccines (OPV) maker in India .In the formulation division, company is concentrating in medicines for pain management, cardio vascular disorders and diabetes. Company is a supplier to various UNICEF projects , and recently received an order for’ EasyFive’ vaccines worth $ 222 Million .For oral polio vaccine ,Panacea received an additional order for $ 120 million which is to be supplied in 2010 itself. Government’s thrust in vaccination is a big positive for the company. Due to heavy forex loss ,company posted loss in last year but returned to profit in this FY. Slightly higher debt level is a problem for the company at present. Higher growth rate with improving margin and a cash balance close to Rs.100 Cr mitigate this risk .For the September qtr ,company posted a turnover of Rs.256 Cr ( Rs.169 Cr) and a net profit of Rs.17 Cr ( Rs.2 Cr) . Company is expected to post an EPS of Rs.20+ in FY 2012 .One may BUY at CMP of Rs.192/- for a 50 % appreciation by the end of next FY.